In my scan of newspapers this evening I came upon three very worrying headlines, all from the Telegraph on-line.
First was Barack Obama ‘Doesn’t begrudge bankers their million dollar bonuses’ which to me means that we’ve been thrown to the wolves again. Maybe Timothy Geithner has whispered to him that he can’t do anything about re-regulating the banks without having the WTO breathe down his neck.
Then I saw that China orders retreat from risky assets. What they mean by risky assets is almost anything in dollars that is not guaranteed by the US Government. If they try to unload, for example, their holdings in Californian debt, Arnie could be in deeper shit than in the Terminator films.
And then the real frightener – worse than Wolfman: Britains quarter of a trillion pound exposure to the PIIGS. No, this is not an expensive agricultural research establishment. PIIGS stands for Portugal, Ireland, Italy, Greece and Spain, all of which are pretty rocky at the moment. Now Britain is in for a quarter of a trillion pounds in these countries, but some of the other European countries are in for even more. Britains figure is 16% of GDP. But the table in the article shows that France is in for 30% of its GDP, the Netherlands for 29% and Switzerland for 21%. That’s got to be big money in all these cases. One really scary fact is that Ireland itself is in for 34% of GDP in these countries, presumably in the other four, and Portugal for 24%. All of which makes me wonder just how safe the Euro is. If the Greek government caves in to the massive national protests, then the whole of Europe could become bacon overnight.